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I’ve long believed that the number one source of stress
experienced by home buyers is all the unpredictability that lies
along the home buying timeline: the prospect of unpleasant
surprises that seems to lurk around every corner. Fact is, there
are some commonly arising surprises that foul up buyers’ plans
and expectations, killing deals and leaving expectations dashed
and emotions frayed in their wake. These days, that list includes
everything from homes turning out to cost more than the buyer
expected to appraisals coming in below the agreed-upon purchase
price.

Here’s some good news: there are steps you can take to manage the
risks of being taken by surprise while you’re in the process of
buying a home. As I see it, they fall into a handful of
buckets. Here are the five big categories of actions you can take
right now to minimize your chances of having an unpleasant home
buying surprise:

1. Study up. As a smart manager of your life and your finances,
it’s your duty to get as detailed a primer on the ins and outs of
home buying as you need to feel comfortable and confident as you
move forward with the process: what lenders require, the nuts and
bolts of a purchase transaction, that sort of thing. But when
you’re specifically seeking to minimize the risk of unpleasant
surprises, you’ve got to take your real estate education to the
next level, and study up on some very specific subject matter:
your local market, in real-time.

What I mean is that markets vary a lot from place to place, and
individual real estate markets change very quickly. If you’re the
sort of savvy buyer that’s been stockpiling your cash for a year
or more in preparation for buying, it’s entirely possible that
the market dynamics you’ll face when you get out there will be
very different from those dynamics which inspired you to buy in
the first place. It’s a pretty unpleasant surprise to expect to
have your pick of the market, then lose out on the first few
‘dream houses’ you find to other offers.

Studying up on your local market empowers you to rejigger your
search and offer strategies to be successful without having to
first experience these sorts of traumas and dramas. It may also
allow you to explore new alternatives for achieving the results
you want, like buying via an online auction or

Neighborhoods where homes lagged for months on end a couple of
years ago are starting to seem some new life this spring, as
buyers like you who have been waiting and saving have begun to
sense the bottom of the market might actually have passed.
Anecdotally, I’m hearing many more local agents across the
country reporting receiving 2 or 3 offers on homes they couldn’t
sell at all 18 months ago, and many more buyers reporting that
the ‘good’ homes come on and off the market much more quickly
than anytime in recent years.

But, again - this stuff is hyperlocal. So ask your agent to help
you understand the actual data of the housing market in the
neighborhood(s) you’ll be hunting in. Specifically, look at how
the number of days a home stays on the market (DOM), inventory
levels and the list price to sale price ratio have been trending
over the last 6 months to 1 year.

2. Team up. It never ceases to amaze me the amount of expertise
and plain old help that goes untapped - and the avoidable stress
and expense that are incurred - because buyers don’t even think
to express certain concerns to their real estate and mortgage
pros. If there are particular potential surprises or other issues
that keep you up at night, you should clearly express those to
your team of real estate and mortgage professionals, and enlist
their help in keeping them at bay.

Obviously, not all surprises are within your agent or mortgage
broker’s power to prevent; and many of the risks that you worry
about are things they’re surely already making their best efforts
to manage. But if your team knows that your closing cost cash is
to-the-penny tight, or that your move-in timeline is hair-trigger
touchy, that knowledge might inspire them to call in favors like
a free rate-lock extension from their rep at your lender, or to
set up a strategic solution, like negotiating your ability to
move in a few days before closing.

This knowledge also gives them the signal to educate you about
what factors will impact the particular surprises you most dread.
And that, in turn, allows you to go from wondering in the
wilderness of unknown fear factors, to being able to help them
smartly spot issues before they snowball into badness.

For example, the date on which you close your transaction during
the month has an impact on how much cash you’ll need to bring to
the closing table. Generally, the amount of prepaid interest you
have to pay if your escrow closes the fourth week of the month is
much less than what you’d have to pay if it closed, say, the
second week of the month. But think about that: if you’re
aiming to close at month’s end to keep your closing costs low,
and escrow closes even 10 days late (not at all uncommon, these
days) you could end up with a big spike in the cash you’re
required to bring in to close.

Letting your team know that this would break your heart - and
your bank - can help them quickly act and react to either keep
closing on track or, if that’s not possible, pushing it out to
avoid jacking up your closing costs.

3. Keep up. Like this closing date/closing costs
debacle-in-the-making, there are a number of critical dates and
deadlines in a home buying transaction by which decisions and
deliverables and course-corrections must be made or the seeds for
a scary surprise take root. And only some of the time are
you, buyer, in control of making sure those timelines stay on
track; many other times, loan underwriters, appraisers,
inspectors and lenders are responsible for achieving these
important must-meet dates. What you can control is your own
awareness of all these calendar points, so that you can make more
or less urgent nudges and check-ins, as needed, in order to
ensure that things either (a) stay on track, or (b) don’t take
you by surprise, if they get off track.

Ask your agent and mortgage broker to help you create and stay on
top of an escrow calendar containing all the major and minor
deadlines and tipping points of your transaction, as well as to
leverage this tool to avoid surprises throughout the
transaction.

4. Fess up. It’s one thing to be surprised by something you have
no control over. But imagine how you’d feel if your deal was
killed by a surprise that you (and only you) could easily have
avoided! I’ve personally seen this happen a number of times. One
buyer I know ended up losing her dream home - and her deposit
money - due to false information on her loan application. She’d
apparently gotten away with it on a number of credit
applications, but a mortgage is an entirely different
animal.

Another nearly had the same tragic outcome as a result of telling
her team that she was divorced when, in fact, the divorce was not
final. (The bank then wanted to vet her soon-to-be ex-husband’s
qualifications for the loan. And his credit was really, really
bad. Really.)

When you are in the loan application process, keep in mind that
it in the world of lending, technicalities matter - a lot. This
is not just a conversation with friends; rather, it’s about as
official as you get. So, the things you normally say and do to
describe your life, the things that make up your aspirations and
plans, the way you see things turning out in the near future -
none of these things count as fodder for your loan application.
What does count? The hard cold facts of your status
quo situation - right now. So, be brutally honest about the state
of your life and your finances, warts and all. This might creates
obstacles you’ll have to workaround up front, but I assure you
that is preferable to getting caught in a falsehood - intentional
or otherwise - and having to scramble to try to salvage a deal
days before closing.

5. Fluff up. Your cash and time cushions, that is. The
reason home buying surprises are so stressful is that they
threaten to do one of two things: (a) screw up our timelines for
moving, or (b) force us to come up with more cash than we have at
hand to close the deal. If you get just a few days away
from closing, bags and boxes packed, and are told you need to
bring in just an extra few thousand dollars to close the deal, it
can feel like your home - actually, your life! - is being held
hostage for extra cash, on the one transaction you’ve already
spent years saving up for.

The least stressed-out buyers are those who have built in time
and cash cushions to their home buying and moving plans. Give
yourself the gift of a few weeks of planned overlap in your
ability to occupy your last home and your future one; even if
that means you wait to give your landlord notice until you’re
well into escrow, it empowers you to avoid looking for hotel
rooms and being distressed by the very predictable, very common
occurrence of a late escrow closing. Similarly, if your
home buying-related financial plans involve maintaining a nice,
fluffy cushion of so-called emergency cash even after your
planned down payment and closing costs, you’ll be less likely to
go off the deep end if the lender requires you to drop $500 on
repairs to get the deal closed.

Agents: What are the most common, unpleasant surprises you
see arise during home buying, and what advice do you give your
clients for preventing them?